Worries over the global trade outlook have also continued to benefit the GBP/AUD exchange rate, with commodity prices still under a significant degree of pressure.

Demand for the commodity-correlated Australian Dollar (AUD) has naturally weakened in response to fears of a US-instigated trade war, with the Australian economy exposed to any deterioration in the global economic outlook.

A stronger US Dollar (USD) has equally kept AUD exchange rates under pressure after an unexpectedly strong University of Michigan confidence index boosted optimism in the underlying health of the world’s largest economy.

With the Federal Reserve looking set to raise interest rates once again at its March policy meeting the appeal of the Australian Dollar is unlikely to improve in the near term.

However, if Thursday’s raft of Australian employment data points towards a continued tightening of the domestic labour market this could prompt the GBP/AUD exchange rate to lose some of its upward momentum.

Further volatility is forecast for the GBP/AUD exchange rate on the back of the Bank of England’s (BoE) latest policy meeting.

While no action is anticipated at this juncture the Pound could still some significant movement in response to the general tone of policymaker commentary.

If there appears to be a greater shift towards hawkishness within the Monetary Policy Committee (MPC) this would give investors incentive to continue piling into GBP exchange rates.

Even though the prospect of any imminent interest rate hike is distinctly limited the Pound could find encouragement in the suggestion that the BoE is taking a more optimistic view, in spite of concerns over the potential negative impact of Brexit.

As Viraj Patel, research analyst at ING, noted:

‘While it may be too early for BoE officials to offer markets a clear signal of intent over a forthcoming rate hike – as they did in September 2017 – we do think the reiteration of a resilient UK economy and concerns over sticky above-target inflation will equate to sufficient enough signal to keep UK rates supported.’

Unless the BoE expresses fresh doubts over the outlook of the UK economy this should be enough to keep the GBP/AUD exchange rate on a stronger footing, for the time being.